ECONOMICS

Economics



Product Life Cycle

Ans. 1) Product

The product which I have selected to see the life cycle is New 2012 Toyota Camry from Toyota. This product launched in the mid of September 2011. Toyota Camry is available in 10

Colours starting from Super White, Sandy Beach Metallic, Magnetic Gray Metallic, Cypress Pearl, Cosmic Gray Mica, Clearwater Blue Metallic, Classic Silver Metallic, Barcelona Red Metallic and Attitude Black Metallic..

A.)Product's life cycle with Diagrams

New 2012 Toyota Camry is in its introduction stage as it had been launched in the mid of September 2011. As we know that there are four stages in product life cycle: introduction stage, growth stage, maturity stage and lastly the declining stage. PLC has to do with the life of the product in market considering the business cost and sales variables.

Introduction stage: In the introduction, product been launched in the market with more effort of creating awareness of product as Toyota is the leading automobile company in UK. Growth Stage: In the growth phase, volume of sales increased along with an increase in competition chances for high production and profit experienced in this stage. Toyota Camry undoubtedly will increase its sales, due to those attractive colours and most importantly they have used the entire new seventh generation, redesigned from top to bottom but the styling suggests a milder update along with sporty body treatments and 17 to 18 inch alloy wheels, versus 16 inch steel wheels on the base model which admired, by UK youngsters.

Maturity Stage: In this stage, the companies need to decide whether or not to strive to become one of the "big three" and make a profit on high volume and low cost, or adopt a strategy of occupation of niches and profit with a high volume inferior margin. Declining Stage: In the last stage of decline, the product starts to lose its appeal to consumers who are beginning to be attracted to new products that satisfy the same need for a complete, and consequently the sales drop.

B.)Characteristics PLC

Characteristics of the product Life cycle Introduction Stage: Costs are high, sales are low and demand for the product is not so much as it is new and no profit generated in this stage. In this stage, company uses Rapid, slow skimming strategies or Rapid or slow penetration strategies. Toyota Camry is line product of Toyota which is purely new in the market, so Rapid penetration strategy is suitable. Further, promotional expenditures are at their highest level in terms of sales due to the need for marketing in order to inform potential consumers, inducing product testing and ensuring the distribution to retail outlets (Nijs & Hanssens, 2001).

Growth stage: The growth stage characterized by a rapid increase in sales. New competitors enter the market, which attracted by the opportunities in the industry. They introduce new product features and expand distribution. The companies maintain their spending on promotion at the same level or a slightly higher level in order to face competition and continue educating the ...